HealthCheck, April 2014

Academy Activities

The Academy launched its new Health Cost and Quality of Care Initiative—Examining the Health Care Equation: Actuarial Perspectives on Cost and Quality—at an April 7 briefing on Capitol Hill. That morning, the Academy’s Health Care Costs Work Group released the first in a series of papers that will examine cost growth, and explore options to reduce long-term spending growth and promote high-quality care. Speakers at the briefing provided an overview of the new initiative, highlighted the Academy’s new partnership with the Health Care Cost Institute, and discussed New Models of Care Delivery, the first paper in the series.

The Health Solvency Work Group sent a letter to the National Association of Insurance Commissioners’ Health Risk-Based Capital Working Group on March 11, offering ideas for alternatives to increasing risk-based capital factors to cover the three risk-sharing mechanisms in the Affordable Care Act (ACA).

Legislative and Regulatory Updates

On April 1, President Obama signed into law a bill that preserves the sustainable growth rate for one year, delaying a cut in Medicare reimbursements for physicians. The Protecting Access to Medicare Act of 2014 (H.R. 4302) prevents a 24 percent cut in Medicare reimbursement for physicians that would have taken effect on April 1 without congressional action.

The law grants Medicare physicians a 0.5 percent fee increase through the end of 2014, and provides higher Medicare payments to hospitals and ambulance services in such areas. It delays the deadline to implement the new International Classification of Diseases, Tenth Edition (ICD-10) diagnostic and procedure code sets by one year, to Oct. 1, 2015. It also delays implementation of the new inpatient payment rule for hospitals, known as the ‘two-midnight rule,’ by six months. The rule will now take effect in March 2015.

The Department of Health and Human Services (HHS) issued a proposed rule on Mar. 21 addressing health insurance discontinuation and renewal, the Small Business Health Options Program, adjustments to risk corridors and medical loss ratios, and technical issues associated with the 2014 open enrollment. Comments on the proposed rule are due by April 21.

On March 12, HHS issued the final rule and final funding methodology establishing the Basic Health Program (BHP.) The final rule establishes the BHP, which gives states the flexibility to establish a health benefits coverage program for low-income individuals who would otherwise be eligible to purchase coverage through the state’s exchange. The rule sets forth a framework for BHP eligibility and enrollment, benefits, delivery of health care services, transfer of funds to participating states, and federal oversight. The final funding methodology determines federal payment amounts for states that establish a BHP. The total BHP payment amount will be based on multiple “rate cells” in each state. Both the final rule and the final funding methodology are effective Jan. 1, 2015.

In the News/Media Activities

A New York Timesarticle on the Genetic Information Nondiscrimination Act cited an Academy statement on adverse selection and rate stability.

A graphic from the Health Practice Council’s fact sheet on the ACA’s risk-sharing mechanisms was included in a Yahoo! News story on 2015 insurance premiums.

The Academy responded on March 19 to remarks made by the chairman of the Republican National Committee that mischaracterized actuaries’ work related to the ACA. The response, which noted the valuable actuarial analysis that individual members and the Academy provided during congressional deliberations on the law, was covered by The Hill, Politico, Life and Health Advisor and other media outlets.